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Asian stocks have had a stellar year, but you wouldn't guess it from the sour tang of flop sweat wafting from its markets. Hong Kong's Hang Seng Index, home to big Chinese stocks available to global investors, is up 22% this year, while Indian stocks are up 25%. Smaller markets boast gains of 27% in Thailand and 35% in the Philippines. Even the Nikkei is up 18%. The worst laggards are Chinese stocks restricted to locals, but even the Shanghai Composite Index has rebounded 10% in December and could end 2012 flat—not bad after double-digit-percentage declines over each of the past two years.

So why the long faces? With Europe and the U.S. stalling, Asia is losing its export growth engine. Indian government reform aimed at boosting investment and agriculture, and Beijing's first new leaders in a decade, both promise change. But transformation takes time. Asia wants to become less reliant on belt-tightening Westerners, but until its consumers can afford to spend more, its markets are still ruled by outside forces. And this year showed that the Pacific Ocean, time zones, and cultural differences are no barrier to the same risk-on, risk-off impulses afflicting the U.S.

You can easily mistake the 2012 charts of many Asian markets for the Standard & Poor's 500: There's the same steep first-quarter rally and the same second-quarter flight, as global-growth concerns grew, before synchronized money-printing by global central banks eked out a jagged second-half recovery. About the only difference: Asia, with no fiscal cliff, was spared November's bout of selling.

Still, all of our printed money has to go somewhere, and in a world of drab growth, emerging Asia expanded 6.1% this year, outpacing 2.7% for Latin America, and 2.6% for emerging Europe. China has slowed after years of rabid growth, but the new normal of near 8% may prove more sustainable. Asian governments still have tools for goosing their economies, which is one reason that its central banks aren't cutting rates further, and strengthening currencies support buying power.

Meanwhile, I'm happy to note that my bullish 2012 picks are up an average 13.9%, three times better than the 4.2% benchmark average. Gains were counted from Mondays after publication through Dec. 14, and compared with the MSCI Asia index in the period. Dividends were excluded, even though I tended toward safer dividend payers in my first year of covering Asia.